Workers’ wages depleted as prices keep on rising

Kevin Brown, savings specialist at Scottish Friendly

THE UNEMPLOYMENT rate in the UK has risen as companies continue to lay off workers and the jobs market declines. The news comes as the Office for National Statistics (ONS) releases the latest employment figures.

The new data from ONS shows that the UK’s jobless rate rose to 3.9% in the January-March quarter – it was at 3.8% a month earlier.

Kevin Brown, savings specialist at Scottish Friendly, has commented on this latest data : “Workers pay continues to rise but it is just not enough to keep pace with inflation, which means in real terms their earnings are still in sharp decline.

“At a rate of 7%, those working in the public sector enjoyed the biggest rise in regular pay for 20 years in the three months to March. Combined with the private sector, overall regular pay was up 5.8%, which is among the highest rates seen outside of the Covid-19 pandemic.

“The problem is these figures are misleading because in reality when you factor in inflation, people’s earnings are in decline. In real terms, total pay, which includes bonuses, fell by 3% on the year which is among the biggest on record.

“Unfortunately, there is no escape from inflation and it is workers on lower incomes who are most susceptible to continued price rises. To add to their woes, there are also signs that the jobs market is beginning to suffer as businesses struggle with the duel effects of high inflation and high interest rates.

“Unemployment crept up to 3.9% in January to March while firms cut their payrolls by 136,000 in April, the biggest fall since February 2021. Households should keep on doing all they can to minimise spending and to build up their savings and investments for as long as possible, to protect against any future shocks to their family’s finances.”

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